US embassy cable - 05TAIPEI2881

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002881 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, PINR, CH, TW, Domestic Politics, Cross Strait Politics 
SUBJECT: PRESIDENTIAL VIEWS ON CROSS-STRAIT POLICY, 
DOMESTIC POLITICS 
 
REF: A. TAIPEI 2595 
     B. TAIPEI 2786 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: Two close confidantes of President Chen 
Shui-bian told AIT that the President is comfortable with the 
current state of cross-Strait relations.  In separate 
conversations, Presidential Office Deputy Secretary General 
Ma Yung-cheng and National Security Council (NSC) Senior 
Advisor Lin Jin-chang told AIT that Taiwan will sit tight 
until the PRC responds to Premier Frank Hsieh's recent 
designation of non-governmental organizations to discuss 
direct transportation links and agriculture.  Chen aides 
asserted that the President is unconcerned about PRC attempts 
to use the KMT as an alternate negotiating channel.  "If they 
want progress in cross-Strait interactions, Hsieh has told 
them how to get it," Ma stated, "if they want to play 
domestic political games with the KMT, it will only back 
fire."  Ma said that President Chen is convinced that KMT 
Chairman Lien Chan's recent visit was a strategic error for 
the KMT.  The KMT's 2008 candidate will either have to 
disavow the KMT-CCP agreement, Ma confidently asserted, or 
lose the election.  Both Lin and Ma said that President Chen 
has written off People First Party (PFP) Chairman James Soong 
as a lost cause.  End Summary. 
 
Cross-Strait Policy: Content to Wait 
------------------------------------ 
 
2. (C) Two longtime Presidential insiders, Presidential 
Office Deputy Secretary General Ma Yung-cheng and NSC Senior 
Advisor Lin Jin-chang separately told AIT that President Chen 
is confident that the government has regained full control 
over the course of cross-Strait relations.  According to both 
officials, Taipei assesses that Premier Frank Hsieh's June 13 
speech (Ref A) has put the ball firmly back in Beijing's 
court.  By designating non-governmental organizations to talk 
about PRC initiatives on direct flights, fruit, and tourism, 
both officials stated, Hsieh has offered the PRC a clear 
roadmap to achieving progress on cross-Strait contacts. 
 
3. (C) Ma said that if the PRC fails to respond to Hsieh's 
initiative and instead tries to play domestic Taiwan 
politics, it will only backfire on them.  "They misjudged the 
long-term impact of the Lien/Soong visits," Ma stated, "they 
raised expectations for a breakthrough, but failed to follow 
through effectively to maintain the momentum."  Ma noted that 
if the PRC continues to put all of its eggs in the Lien 
basket, it could risk creating a backlash among the Taiwan 
public.  The NSC's Lin said that the PRC will inevitably try 
to use its KMT channels first, but would sooner or later 
realize that its interests are better served by dealing with 
the organizations designated by Hsieh on June 13 (Note: Lin's 
NSC colleague, Chen Chung-hsin, told AIT that if the 
KMT-controlled Provincial Farmers Association strikes a deal 
to open fruit exports to the Mainland, the government will 
sabotage the plan by inspecting the PRC-bound fruit so slowly 
that it will rot before leaving the island.  End Note.) 
 
Lien Chan: The Last of the Chinese 
---------------------------------- 
 
4. (C) Chen aides say they are also confident that as soon as 
KMT Chairman Lien Chan steps down, the KMT will start to back 
away from their flirtation with Beijing.  "We will ask one 
question of the KMT candidates in the 2008 election," Ma 
continued, "are you going to implement the KMT-CCP five point 
agreement if you win office?"  No KMT candidate could answer 
in the affirmative and win a popular election in Taiwan, Ma 
confidently concluded.  For this reason, Ma predicted that 
the next KMT Chairman will move quickly to distance himself 
from Lien's pro-China policy line and move to repair 
relations with the United States, starting by taking a more 
positive attitude on defense procurement. 
 
5. (C) Ma said that he has seen reports that one of the major 
factors driving the PRC's rush to cut a deal with the KMT 
before Lien's resignation is an assessment that Lien 
represents the last of a generation of KMT leaders who fully 
identify themselves as Chinese.  "Lien's frame of reference 
is China, he was born in Xian, went to school in China and 
thinks that he is Chinese," Ma (himself an ethnic Mainlander) 
continued.  KMT Chairman candidate Ma Ying-jeou is a 
Mainlander, "but he was born in Hong Kong and raised there 
and Taiwan -- Mainland China doesn't have that nostalgic pull 
for him."  Ma Yung-cheng added that Legislative Yuan (LY) 
President Wang Jin-pyng's "lack of Chineseness goes without 
saying, he is Taiwanese to the bone." 
 
6. (C) While Chen aides are confident that the next KMT 
Chairman election will distance himself from Lien's pro-China 
line, they assert that Lien and his KMT elders will not go 
quietly.  Ma said that his office tracks how the KMT handles 
the disposal of its assets and, based on a recent slowdown in 
divestitures, assesses that Lien is preparing to retain 
control over the KMT's funds beyond July 16.  Ma added that 
by keeping his hand on the purse strings, Lien may calculate 
that he can effectively play Wang and Ma Ying-jeou off 
against each other.  The NSC's Lin offered a similar 
assessment, but said that even with control over the money, 
Lien will be surprised how quickly he is forgotten. 
 
Pivotal Role No More 
-------------------- 
 
7. (C) Chen aides say that the President is finished with PFP 
Chairman James Soong.  Ma said that Soong seriously 
overplayed his hand in the past six months.  "He promised 
everyone something," Ma stated, "but in the end could not 
deliver anything to anyone."  Ma asserted that Soong could 
have carved out a political niche for the PFP between the KMT 
and DPP by supporting cross-Strait contacts and increased 
defense spending at the same time.  "Instead," Ma continued, 
"he chose to race Lien to the pro-China bottom."  Ma admitted 
that Soong did not meet PRC Taiwan Affairs Office (TAO) 
Director Chen Yunlin, but said that the Presidential Office 
has solid information that PRC officials have pressed Soong 
through intermediaries over the past eight months to use the 
PFP's LY Caucus to block the Special Defense Procurement 
Budget and amendments that would substitute a referendum for 
the National Assembly in confirming future constitutional 
reforms.  (Comment: the Presidential Office source is likely 
long-time Soong confidante Raymond Wu.  Wu told AIT that he 
has become increasingly disturbed by Soong's willingness to 
betray Taiwan's interests with the PRC for personal gain.  Wu 
was particularly upset over Soong's May visit to the 
Mainland.  Over the past year, Wu has maintained regular 
contacts with NSC Secretary General Chiou I-jen.  End 
Comment.) 
 
8. (C) Chen advisors dismiss Soong's demand for an apology 
over the Chen Yunlin accusation.  The NSC's Lin stated that 
Soong is using the demand to delay making a decision on what 
to do next.  Soong cannot make this decision, Lin continued, 
until he knows who is the new KMT Chairman.  Lin stated that 
the Chen administration will ignore Soong and focus its 
future efforts on working with the new, and presumably more 
reasonable, KMT Chairman to move forward on the government's 
legislative agenda.  Lin acknowledged, however, that an 
isolated and desperate PFP could continue to play a spoiler 
role in Taiwan politics, but said that there was little 
anyone could do but wait for the party to dissolve.  Ma said 
that the President is willing to let the Premier offer 
incentives to individual KMT and PFP legislators to cross the 
aisle (Ref B), but asserted that Chen himself will not 
involve himself in the effort. 
 
Comment: Chen Back in the Saddle 
-------------------------------- 
 
9. (C) It appears that the Chen administration's fear that 
the Lien/Soong Mainland visits would deprive the President of 
control over the pace of cross-Strait policy has not 
materialized.  Chen aides seem genuinely convinced that 
Beijing's divide-and-conquer strategy towards Taiwan will 
backfire on China and Taiwan's opposition.  This confidence 
contrasts with the views of many foreign policy officials in 
the EY and ruling party, who continue to fret over the 
threats posed by PRC "united front" tactics to erode Taiwan's 
interests.  Both these postures are unlikely to stand the 
test of time as pressures build in agriculture, airlines, and 
tourism circles to realize pragmatic gains in cross-Strait 
traffic. 
KEEGAN